Trump's Double Game: After Slapping Heavy Tariff on India, Ex-President Inks Major Oil Deal with Pakistan

While India faces a 25% import tariff, Trump signs a landmark agreement to tap Pakistan’s oil reserves—fueling speculation and strategic concerns.

In a dramatic diplomatic move that could reshape South Asia’s energy and trade dynamics, former U.S. President Donald Trump has imposed a 25% tariff on Indian goods while simultaneously announcing a major oil exploration agreement with Pakistan. The back-to-back decisions, made within hours of each other on Wednesday, have triggered speculation about Trump’s intentions and the future of Indo-U.S.-Pakistan relations.

Why Did Trump Target India with a 25% Tariff?

Trump justified the sudden tariff hike—effective August 1—as a response to two key concerns: America’s trade imbalance with India and New Delhi’s continued oil imports from Russia. In a press briefing, Trump stated:

Trump says will work with Pakistan to develop oil reserve pic.twitter.com/HlJcBCjfhs

— Sidhant Sibal (@sidhant) July 31, 2025

“BRICS is a group essentially working against the U.S., and believe it or not, India is part of it. This is an attack on the dollar. We won’t tolerate it.”

He added that the tariff is partly a reaction to India’s involvement in BRICS and partly due to persistent trade deficits.

U.S.-Pakistan Oil Deal Raises Eyebrows

Shortly after announcing penalties on India, Trump took to his social media platform Truth Social to unveil a joint U.S.-Pakistan oil exploration initiative.

“We’ve just signed a new deal with Pakistan to develop its massive oil reserves. We are now selecting the oil company that will lead this partnership. Who knows, maybe one day Pakistan will sell this oil to India!”

This unexpected development hints at a rare moment of commercial cooperation between Washington and Islamabad—two nations whose ties have frequently been strained by geopolitical and security issues.

Deal Was in the Pipeline

While the announcement came as a surprise to the public, diplomatic preparations had been underway for weeks. Just last week, Pakistan’s Foreign Minister Ishaq Dar confirmed that talks with U.S. Secretary of State Marco Rubio were nearing finalization. Both sides discussed deeper collaboration in minerals and energy, setting the stage for the oil agreement.

The U.S. currently recognizes Pakistan as a major non-NATO ally, and the latest move is seen as part of a broader American strategy to counterbalance Chinese influence in Asia.

India-Pakistan Tensions in the Background

Trump’s remarks come just months after heightened military tensions between India and Pakistan. Following a deadly terror attack in Kashmir on April 22, India launched retaliatory strikes on May 7, leading to a ceasefire on May 10.

Trump has previously claimed credit for helping defuse the situation—a view echoed by Islamabad, though India maintains that it does not accept third-party mediation in its disputes with Pakistan.

🔄 Dialogue with India Continues—Despite Tariff

#WATCH | On a question by ANI regarding whether he is open to negotiating with India on the tariffs, US President Donald Trump says, "We are talking to them now. We will see what happens. India was the highest or just about the highest-tariff nation in the world...We will see. We… pic.twitter.com/BviM6uOce3

— ANI (@ANI) July 31, 2025

Despite the steep trade penalty, Trump clarified that diplomatic engagement with India remains ongoing:

“We’re still talking to India. The BRICS angle is also part of this.”

This suggests that while the tariff might be a tactical move, the door for negotiations with New Delhi isn’t closed—yet.

📊 Strategic Takeaways

• India’s Position Weakened: The 25% import tax is likely to make Indian goods costlier in the U.S. market, hurting exporters and increasing tensions.

• Pakistan Gains Momentum: With the oil partnership, Pakistan gets a rare opportunity to strengthen economic ties with Washington.

• Geopolitical Realignment? Trump’s actions signal a possible pivot in U.S. foreign policy in South Asia—one that could strain traditional alliances.

As American firms prepare to drill oil in Pakistani territory, the real question now is whether Trump’s vision of Pakistan selling oil to India might actually materialize—and at what cost to the region’s delicate balance.